Aircraft borne optical in situ size distribution measurements were performed within Arctic boundary layer clouds with a special emphasis on the cloud top layer during the VERtical Distribution of Ice in Arctic clouds (VERDI) campaign in April and May 2012. An instrumented Basler BT-67 research aircraft operated out of Inuvik over the Mackenzie River delta and the Beaufort Sea in the Northwest Territories of Canada. Besides the cloud particle and hydrometeor size spectrometers the aircraft was equipped with instrumentation for aerosol, radiation and other parameters. Inside the cloud, droplet size distributions with monomodal shapes were observed for predominantly liquid-phase Arctic stratocumulus. With increasing altitude inside the cloud the droplet mean diameters grew from 10 to 20 μm. In the upper transition zone (i.e., adjacent to the cloud-free air aloft) changes from monomodal to bimodal droplet size distributions (Mode 1 with 20 μm and Mode 2 with 10 μm diameter) were observed. It is shown that droplets of both modes co-exist in the same (small) air volume and the bimodal shape of the measured size distributions cannot be explained as an observational artifact caused by accumulating data point populations from different air volumes. The formation of the second size mode can be explained by (a) entrainment and activation/condensation of fresh aerosol particles, or (b) by differential evaporation processes occurring with cloud droplets engulfed in different eddies. Activation of entrained particles seemed a viable possibility as a layer of dry Arctic enhanced background aerosol (which was detected directly above the stratus cloud) might form a second mode of small cloud droplets. However, theoretical considerations and model calculations (adopting direct numerical simulation, DNS) revealed that, instead, turbulent mixing and evaporation of larger droplets are the most likely reasons for the formation of the second droplet size mode in the uppermost region of the clouds.